Why Profit Sharing is Smart PR

Are you an entrepreneur interested in shoring up your reputation and building the best success team possible? There is nothing better for your internal public relations with your skilled workers than plain, old-fashioned compensation.

It’s a given that top sales people make their careers on commission, but why not share some of that love with your skilled workers, you know, the people that get up every day to help you turn your business idea into a commercial success?

Some would caution that if profit sharing is not common in your industry, it’s best to steer clear of it. Now, that may be solid advice, but first you need to know WHY it might not be done in your line of work. First, is it legal? Incentivizing certain positions may violate your industry’s compliance or ethical standards. Be sure to check that out well before you start passing out dividends.

Also, you need to consider where your company is within your growth paradigm. Are you established? A startup? A venture capitalized business? Profit sharing should always be subsequent to any loan repayment or other investor agreements, and startups may not have the ready cash reserve to feasibly offer these perks. Profit sharing does no one any good if you bankrupt your savings to make it happen.

And, it should be said here that we are strictly talking about profit sharing, not equity offerings. Unless your company is being prepped for sale, or you are on a meteoric rise and looking to go public, equity offerings might as well be empty promises. Annual profit bonuses, however, are another story altogether.

If you can afford to, profit sharing can be a tremendous vehicle to increase corporate morale and a solid long-term investment in your internal PR.